Income From Other Sources

Income from Other Sources
Presentation
Tripathi Online Educare

A. Income Chargeable Under The Head “Income From Other Sources” :-
1. Dividends
2. Winnings From Lotteries, Crossword Puzzles, Horse Races, Card

Games, Other Games Of Sort, Gambling, Betting Of Any Form Or
Nature.
3. Recovery Of PF And Welfare Fund Contributions From Employee By

Employer.
4. Interest On Securities.
5. Income From Machinery, Plant Or Furniture Let On Hire.
6. Sum Received From Keyman Insurance Policy.

7. Income From Sub-letting Of A House Property.
8. Casual Income And Non-recurring Income.
9. Insurance Commission.
10. Family Pension.
11. Director’ Sitting Fee.
12. Interest On Bank Deposits.
13. Deposits With Companies.
14. Interest On Loans.
15. Income From Undisclosed Sources.
16. Remuneration Received By Members Of Parliament.
17. Examinership Fees From Non-employer.

18. Interest From URPF On Employees Contribution
19. Rent From Vacant Plot Of Land.
20. Agricultural Income From Land Situated Outside India.
21. Interest On Income Tax Refunds.
22. Income From Royalty, Not Taxed Under Business Or Profession.
23. Guarantee Commission To Directors.
24. Director’s Commission For underwriting Shares.
25. Gratuity Received By A Director Not As An Employee.

B. List The Incomes Which Are Chargeable Under The Head “Income
From Other Sources” But Exempt From Tax U/S 10(15) :-
1. 12 Year National Saving Annuity Certificates.
2. Treasury Saving Deposit Certificates.
3. Post Office Cash Certificates.
4. National Plan Saving Certificates.
5. Post Office National Saving Certificates.
6. Post Office Saving Certificates.
7. Post Office Cumulative Time Deposits.
8. Scheme Of Fixed Deposits Governed By The Govt. Savings

Certificates Rules 1968.
9. Scheme Of Fixed Deposits Governed By The Post Office Rules 1968.

10. 10.5% Tax Free Bonds Issued By The HUDCO.
11. Interest Payable By A Public Company Registered In India With The

Main Object Of Providing Long Term Finance For Purchase Or
Construction Of Residential Houses
12. Nri Bonds – 1988 Issued By State Bank Of India.
13. 9.25% Tax Free Bonds Issued By Rural Electrification Corporation Ltd.
14. 10.5% Secured, Redeemable, Non-convertible Tax-free Bonds Issued By

NHPC Ltd.
15. Interest On Gold Deposit Bonds Issued Under The Gold Deposit Scheme
1999 Notified By The Central Government.
16. Interest On Bonds Issued By A Local Authority And Notified By Central

Govt.

C. Deduction Available In Computation Of Income From Other Sources
U/S 57 :-
1. Any Reasonable Sum Paid By Way Of Commission Or Remuneration

For Purpose Of Realising Dividends. (Other Than Dividend From
Indian Co.)
2. Contributions To ESI, EPF And Superannuation Fund Paid Before Due

Dates Under Relevant Acts.
3. Repairs, Insurance And Depreciation On Assets Let Out.
4. For Family Pension 1/3 Or Rs. 15,000 Whichever Is Less.
5. Any Other Expenditure (Not Being Capital Expenditure) Expended To

Earn Such Income.

D. Deduction Not Available In Computation Of Income From Other Sources U/S 58 :-
1. Personal Expenses Of An Assessee.
2. Any Interest Paid Outside India, On Which Tax Has Not Been Deducted At Source.In Such Cases Interest
Paid Or Payable Will Not Be Allowed As Deduction.
3. Any Amount Of Taxable Salary, Paid Outside India Without Deduction Of Tax At Source Or Not Has Been
Paid Thereon, Will Not Be Allowed As Deduction.
4. Any Expenditure Or Allowance In Connections With Income By Way Of Any Winnings From Lotteries,
Crossword, Puzzle, Races Including Horse Races, Card Games Or Any Other Games Of Any Sort Or
Form Of Gambling Or Betting Of Any Form Or Nature Will Not Be Allowed As Deduction. However In
Case Of Income From Horse Races, The Expenditure Incurred To Maintain The Horses Shall Be Allowed
As Deduction To The Assessee Being The Owner Of The Horses Maintained By Him For Running In
Horse Race.

E. Important Points :-
1. Dividends From Indian Company Is Exempted.
2. Income From Other Sources U/S 56 Is To Be Assessed As Per Accounting Method Adopted By The
Assessee i.e. Cash Or Accrual etc.
3. Bonus Shares Received Are Not Taxable As Dividend In The Hands Of Equity Share-holder.However
When They Are Sold, Tax On Capital Gain Is Payable.
4. Following Receipts Are Not Taxable As Income,

a. Withdrawal From PPF On Maturity Of Policy Or Before.
b. Refunds Form Lic On Maturity Of Policy Or Survival Benefit.
c. Gifts From Friends/Relatives (Purely Of Personal Nature). Subject To conditions.
d. Awards In Public Interest.
e. Income Tax Refund (But Interest On Refund Is Taxable)
f. Compensation For Personal Injury Like Loss Of Hand.
g. Awards Received By A Non-professional Sports Man Is Gift.
h. Savings Made By House Wife From Monthly Amount Paid By Husband.
i. Receipts From Huf.
j. Share Of Profit In Firm.
5. Award like “best surgeon” “best lawyer” i.e. Excellence in service from an institution which has interest in
his profession – exempt u/s 10(3).
6. In case of NSC/KVP/IVP the interest is taxable on accrual basis as income of the respective year over the
period of securities as per the table announced by the government so in the year of maturity only that
years interest is taxable.
7. Person having income from other sources can choose “method of accounting” for the tax purpose.
8. Income from lotteries/ dividend etc. To be taken at gross amount i.e. (Net + TDS ).
9. Gifts are not incomes.

F. Gift i.e. Receipts Without Consideration u/s 56(2)(v).
Where any sum of money or property received during the year without consideration by an individual or
an HUF from any person on or after 1-10-2009 are taxable under the head “income from other sources”.
Nature of Asset Particulars Taxable Value

Money Without The whole amount, if exceeds Rs.50,000
Consideration
Movable Property Without The fair market value, if exceeds Rs.50,000
Consideration
Movable Property Inadequate The difference between the fair market value and the
Consideration consideration, if exceeds Rs.50,000
Immovable Without The stamp duty value, if exceeds Rs.50,000
Property Consideration
Immovable Inadequate The difference between the stamp duty value and the
Property Consideration consideration, if exceeds Rs.50,000

1. Condition for applicability,
a. The recipient is an individual or a hindu undivided family.
b. For any sum of money exceeding Rs.50,000.
c. For any movable property, the fair market value exceeding Rs.50,000.
d. For any immovable property, the stamp duty value exceeding Rs.50,000
e. Gift must not be in kind.
2. Tax treatment,
If the above conditions are satisfied, the whole of such sum received by the individual/HUF will be taxable
u/s56(2)(v) under the head “IFOS”.
3. Property includes, land, building, share and securities, jewellery, drawings, paintings, sculptures, any work of art.
4. Exceptions,
Section 56(2)(v) Does Not Cover The Following, If Any Sum of Money or Property Received:
a. From Any Relative,
Relative Here Means –
i. Spouse Of The Individual
ii. Brother Or Sister Of The Individual
iii. Brother Or Sister Of The Spouse Of The Individual
iv. Brother Or Sister Of Either Of The Parents Of The Individual
v. Any Lineal Ascendant Or Descendant Of The Individual
vi. Any Lineal Ascendant Or Descendant Of The Spouse Of The Individual
vii. Spouse Of The Person Referred To In Clauses (ii) To (vi)

b. On The Occasion Of The Marriage Of The
Individual (Whether Gift Is Received From
Relative Or Outsiders).
c. Under A Will Or By Way Of Inheritance.
d. In Contemplation Of Death Of Payer or Donor.
e. From Any Local Authority
f. From Any University/Educational

Institution/Charitable Trust.
g. Any Sum Of Money Not Exceeding Rs.50,000.
G. Income From Certain Units Of UTI Or Mutual Funds

is Fully Exempt U/S 10(35).

From the following information, compute “Income from Other Sources”, of Mr. Dilip.
1. Income from agricultural land in India - Rs.12,000.
2. Income from agricultural land in Nepal - Rs.10,000.
3. Mr. Dilip is a tenant of Mr. Sunil in respect of a bungalow in Goa. Mr. Dililp has in turn rented the
Bungalow to Kapil for a rent for Rs.1,000 per month. Dilip pays rent of Rs.500 per month Sunil.
4. Interest earned
a. Interest on deposits with banks Rs.500.
b. Interest on public provident fund Rs.1,000.
c. Interest on Government Securities Rs.12,000 (Net); Tax Deducted at Source Rs.1,200.
5. Lottery Prize Rs.50,000 (Net). Tax deducted at source Rs.20,000. He had purchased lottery tickets worth
Rs.3,000.
6. He received a refund of Rs.2,500 (Income Tax Rs.2,000 and Interest Rs.500) from the Income tax
department pertaining to the assessment year 2015-16.
Solution:
Name of the Assessee : Mr. Dilip

Assessment Year : 2016-17
Previous Year : 2015-16
Status : Individual
Residential Status : R & O.R.
Pan No. : ________
Computation of Income from Other Sources
Particulars Rs. Rs.
1. Income from agricultural land in India 12,000

Less: Exempt u/s 10(1) 12,000 NIL
2. Income from agricultural land in Nepal 10,000
3. Rent from subletting to Kapil (1000 x 12) 12,000
Less: Rent paid (500 x 12) 6,000 6,000
4. Interest on:
a. Bank Deposits 500
b. PPF 1,000
Less: Exempt u/s 10(11) 1,000 NIL
c. Government Securities (Net) 12,000
Add: T.D.S 1,200 13.200 13,700
5. Lottery Prize:
Net 50,000
Add: T.D.S 20,000 70,000
6. Interest on Income tax refund 500
_______
Income from Other Sources 1,00,200
Note:
1. Expenses on purchasing lottery tickets are not deductible.
2. Refund of Income tax is a capital receipt hence not taxable.

Thank You!

Income From Other Sources

Uploaded by

Copyright:

Available Formats

Income From Other Sources

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Income From Other Sources

Uploaded by

Copyright:

Available Formats

Income from Other Sources

Tripathi Online Educare

2. Winnings From Lotteries, Crossword Puzzles, Horse Races, Card

3. Recovery Of PF And Welfare Fund Contributions From Employee By

5. Income From Machinery, Plant Or Furniture Let On Hire.

6. Sum Received From Keyman Insurance Policy.

Tripathi Online Educare

8. Casual Income And Non-recurring Income.

10. Family Pension.

11. Director’ Sitting Fee.

12. Interest On Bank Deposits.

13. Deposits With Companies.

14. Interest On Loans.

15. Income From Undisclosed Sources.

16. Remuneration Received By Members Of Parliament.

17. Examinership Fees From Non-employer.

Tripathi Online Educare

19. Rent From Vacant Plot Of Land.

20. Agricultural Income From Land Situated Outside India.

21. Interest On Income Tax Refunds.

22. Income From Royalty, Not Taxed Under Business Or Profession.

23. Guarantee Commission To Directors.

24. Director’s Commission For underwriting Shares.

25. Gratuity Received By A Director Not As An Employee.

Tripathi Online Educare

1. 12 Year National Saving Annuity Certificates.

2. Treasury Saving Deposit Certificates.

3. Post Office Cash Certificates.

4. National Plan Saving Certificates.

5. Post Office National Saving Certificates.

6. Post Office Saving Certificates.

7. Post Office Cumulative Time Deposits.

8. Scheme Of Fixed Deposits Governed By The Govt. Savings

9. Scheme Of Fixed Deposits Governed By The Post Office Rules 1968.

Tripathi Online Educare

11. Interest Payable By A Public Company Registered In India With The

12. Nri Bonds – 1988 Issued By State Bank Of India.

14. 10.5% Secured, Redeemable, Non-convertible Tax-free Bonds Issued By

16. Interest On Bonds Issued By A Local Authority And Notified By Central

Tripathi Online Educare

1. Any Reasonable Sum Paid By Way Of Commission Or Remuneration

2. Contributions To ESI, EPF And Superannuation Fund Paid Before Due

3. Repairs, Insurance And Depreciation On Assets Let Out.

4. For Family Pension 1/3 Or Rs. 15,000 Whichever Is Less.

5. Any Other Expenditure (Not Being Capital Expenditure) Expended To

Tripathi Online Educare

1. Personal Expenses Of An Assessee.

Tripathi Online Educare

1. Dividends From Indian Company Is Exempted.

4. Following Receipts Are Not Taxable As Income,

9. Gifts are not incomes.

Tripathi Online Educare

Nature of Asset Particulars Taxable Value

Tripathi Online Educare

Tripathi Online Educare

c. Under A Will Or By Way Of Inheritance.

d. In Contemplation Of Death Of Payer or Donor.

e. From Any Local Authority

f. From Any University/Educational